Custom Sailmaking
Custom Sailmaking
By Karen Schwartz, Associated Press writer
NEW YORK -- If you are what you eat, meet Herb Kelleher.
The chairman of Southwest Airlines is a bit spicy, a touch tangy, plenty salty and completely out of the ordinary -- all over a smooth underpinning.
Over lunch recently, Mr. Kelleher downed three Bloody Bulls (tomato juice, vodka, beef bouillon, tabasco, Worcestershire sauce, celery salt, black pepper, horseradish, and lime juice) and spoke -- without slurring -- of his philosophy.
"It's much better to have fun in life than not have fun," says the man who enthusiastically tasted all the desserts at the table. "I really don't believe that you have to be boring to be successful."
And successful he is. Southwest, a short-haul, low-fare, no-frills airline that serves only peanuts, redefined the way airlines do business. It turned a profit for 23 consecutive years, unprecedented in the industry, with revenues just shy of $3 billion last year. Now the nation's eighth-largest airline, it has never laid off any employees.
In nearly two decades as chairman, Mr. Kelleher has both shaken and stirred the airline with his spirit.
Surely, if the CEO can dress up as Elvis, it's OK to dress-down on the job. If the chairman can arm-wrestle to settle a business dispute, it's reasonable for the flight attendants to surprise boarding passengers by popping out of overhead bins. If the big guy can ride his Harley into corporate headquarters, doing the flight-safety instructions in a rap music style must be acceptable.
Accolades pour forth, from his staff, from his unions -- even from his rivals. The airline consistently ranks high in Transportation Department reports.
"He's a very good leader," said Gary Kerans, president of Southwest Airlines Pilots Association.
At 65, Mr. Kelleher, a chain-smoking, workaholic, grandfather-of-four just signed a new five-year contract. White-haired, lean and 6-feet, 1-inch tall, he looks respectable in a tie and houndstooth blazer, and sounds it -- until he starts joking about having venereal disease.
"I'm not too worried about it," he quipped, "because I'm sure that sooner or later, modern medicine will find a cure."
Granted, his airline's stock trades under the LUV symbol on the New York Stock Exchange, but is this really coming from the head of one of the nation's most respected airlines?
"He's someone we all look up to," said Gregory Brenneman, president of rival Continental Airlines. "We have fun doing battle with him."
And as for the rumor that Mr. Brenneman and Mr. Kelleher have been known to have a few together:
"I think everybody who has ever been around Herb can say they've had a drink with him," Mr. Brenneman said. "He has a beverage every time you see him."
Herbert D. Kelleher grew up in Camden, N.J., where his father was general manager of Campbell Soup Co. Mr. Kelleher credits some of his egalitarian notions to the six summers he spent working on the factory floor.
He majored in English literature at Wesleyan University in Connecticut, then attended New York University Law School, where he made law review while studying the Greenwich Village social scene.
After graduating, he clerked for a New Jersey Supreme Court justice, then worked for a Newark law firm before moving to San Antonio, his wife's hometown.
"I fell in love with Texas instantaneously," he said. "I went out to West Texas and saw about 4 million stars and five satellites in one evening and said, 'This is the place for me."'
The fateful day came in 1966 when a client named Rollin King marched into Mr. Kelleher's law office and outlined a plan that he and banker John Parker had for a short-haul commuter airline. The tale is told that Rollin and Mr. Kelleher then mapped out the strategy on a cocktail napkin in a bar.
Mr. Kelleher filed papers to incorporate the airline on March 15, 1967. Legal wrangling delayed the first flight until June 18, 1971.
Mr. Kelleher said taking delivery of the first plane was the most exciting moment of his career. "All of a sudden (the airline) was a tangible reality instead of just briefs and arguments."
Mr. Kelleher was appointed chairman in 1978, when industry veteran Lamar Muse was ousted in a coup crafted by Mr. King. To this day, Mr. Kelleher refuses to discuss what happened. He took over as president and CEO three years later. It was only then that he gave up his law practice.
The airline grew methodically, carrying more than 50 million passengers last year. In October, it launched service in Providence offering a $118 round-trip to Baltimore. Before Southwest's arrival, the lowest unrestricted round-trip fare was on USAir for $518.
Mr. Kelleher said he feels good about Southwest's low fares. "There are people that are able to see their children more often in a divorced family because they can afford to fly," he said.
But the low fares have also made him a very rich man. In 1994, Fortune magazine estimated that his 1.8 percent stake in Southwest, plus exercisable stock options, were worth $86 million. His salary is $395,000 a year, with a discretionary annual bonus of $172,000.
Yet Mr. Kelleher says his pinnacle of personal achievement has nothing to do with the airline. Instead, it was the present he received on his 65th birthday from the master distiller at Wild Turkey: 65 quarts with a commemorative label.
"You have to be a real devotee over a great many years and have a huge liver" to warrant such a gift, he said.
He might be unconventional, but he's outlasted Frank Lorenzo, Carl Icahn and any number of others in a turbulent industry.
Just how long he can hold out is anyone's guess. Mr. Kelleher said his health is fine and that he has no plans to retire. Still, his work-hard/play-hard lifestyle has analysts wondering what will happen to Southwest when last call finally comes.
Mr. Kelleher dismisses the concerns. "The company is laden with talent. I hate to admit that because it kind of makes me dispensable."
As if to drive home the point, a new book "Nuts!: Southwest Airlines' Recipe for Business and Personal Success," by business consultants Kevin and Jackie Frieberg, maintains the airline would do just fine without fortification from Mr. Kelleher.
Mr. Kelleher claims he had little input into the book, but his visit to New York from company headquarters in Dallas was part of a promotional book tour.
If he's not trying to calm investors' fears about an eventual successor, then why?
"To testify to the fact that it is a legitimate portrayal of the Southwest Airlines culture," he said, aware that some may find the lovey-dovey, relaxed, all-for-one portrayal hard to swallow. "You can do things in a humanitarian, unorthodox way and still be successful financially."
Flight attendant Dean Hervochon, a union official and 15-year Southwest employee, said the company truly is a family, although occasionally, the business aspects of running an airline cause it to be a "dysfunctional" one. He wouldn't elaborate.
Most grievances are quickly resolved, Mr. Hervochon said. "He wants his company happy. He wants his employees happy. He genuinely does care."
Mr. Kerans, the 18-year Southwest pilot agrees, saying rival airlines are not only jealous of Mr. Kelleher's success, "they're particularly jealous of his labor-management relations."
Yet they believe that there will be life after Mr. Kelleher.
"It will continue to thrive," Mr. Hervochon said. "It just probably won't be as much fun."
THE SOUTHWEST GOLDEN RULE
The corporate philosophy at Southwest Airlines, as outlined in the book "Nuts!: Southwest Airlines' Recipe for Business and Personal Success:" Employees are No. 1. The way you treat your employees is the way they will treat your customers. Think small to grow big. Manage in the good times for the bad times. Irreverence is OK. It's OK to be yourself. Have fun at work. Take the competition seriously, but not yourself. It's difficult to change someone's attitude, so hire for attitude and train for skill. Think of the company as a service organization that happens to be in the airline business. Do whatever it takes. Always practice the Golden Rule, internally and externally.
A VERY PUBLIC THANK YOU
On Boss's Day 1994, Southwest Airline's 16,000 employees raised $60,000 to run a full-page ad in USA Today thanking Herb Kelleher for his efforts. The ad read:
For remembering every one of our names.
For supporting the Ronald McDonald House.
For helping load baggage on Thanksgiving.
For giving everyone a kiss (and we mean everyone.)
For listening.
For running the only profitable major airline.
For singing at our holiday party.
For singing only once a year.
For letting us wear shorts and sneakers to work.
For golfing at The LUV Classic with only one club.
For out-talking Sam Donaldson.
For riding your Harley Davidson into Southwest Headquarters.
For being a friend, not just a boss.
Photo by The Associated Press
Herb Kelleher, successful chairman of Southwest Airlines, left, and Executive Vice President Colleen Barrett stand in the boardroom at Southwest in Dallas. Mr. Kelleher, a chain-smoking workaholic and grandfather of four, believes, "It's much better to have fun in life than not to have fun."
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